Saturday, September 11, 2010

Harmony is not appeasement. In other words, if one guy says to another "if you speak, I will kill you," and the other shuts up, it is not an example of harmony. Harmony, in this context, is a state in which two sides agree to coexist peacefully which, in turn, objectively requires mutual respect for individual rights, i.e., the freedom to act without coercion or force. A law-abiding citizen can not live in harmony with a criminal. Yet, such a contradiction is exactly what Obama seeks to impose on Americans with regard to Islam.

In a recent CNN interview, "ground zero mosque" Imam Feisal Rauf issued a veiled threat against Americans, saying, in essence, that if we don't allow the Mosque, we will face the wrath of angry Muslims.

If we move from that location, the story will be that the radicals have taken over the discourse. The headlines in the Muslim world will be that Islam is under attack. And I’m less concerned about the radicals in America than I’m concerned about the radicals in the Muslim world...

...And if we do move, it will strengthen the argument of the radicals to recruit, their ability to recruit, and their increasing aggression and violence against our country.

Meanwhile, Muslims around the world demonstrated and threatened violence against Americans if Quran's were burned. This comes on the heels of generations of violence against the West, including the recent call by a Muslim cleric for the beheading of a Dutch politician and the issuance of fatwas against "offensive" cartoonists and authors. In essence, the Muslim world says over and over: "we will not tolerate dissent or criticism, and if you dare exercise your right to criticize our religion, we will kill you." And, have they killed.

So, what has been the response of our government - those charged with protecting our freedoms -to threats issued by foreign nationals, declarations of war against our country, and state sponsored violence against America and her allies? Obama declares:

As Americans we are not — and never will be — at war with Islam.

What Obama really means is that we are not fighting back against Islamists who are at war with us. To say "we are not at war," is like saying "I'm not in a fight" while someone is punching you in the face. And related to protecting the First Amendment right of those proposing to burn the Quran, such as Pastor Terry Jones, Obama states:

This is a way of endangering our troops, our sons and daughters ... you don't play games with that," Obama told a Washington news conference in which he included an earnest appeal for religious tolerance in the United States to preserve multi-faith harmony.

If you were speaking publicly on some topic, and someone threatened to kill you, imagine your reaction if the response of the police or FBI was, "you idiot - don't play games with that - just don't speak - you are endangering the police who have to protect you. " How is Obama's response any different? Again, the problem is that Obama and his ilk equate "harmony" with appeasement. Evidently, Obama's view is that shutting up promotes "multi-faith harmony" and that the federal government's job is not to protect us from violence but to goad free people into not offending or provoking their enemies. This is why he sent his minions to brow beat Jones into not going forward with his protest:

Obama had appealed to him [Jones] on television, and Defense Secretary Robert Gates in a personal phone call, not to burn the Islamic holy book. Gen. David Petraeus, head of the U.S. mission in Afghanistan, said carrying out the plan would have endangered American troops.

In my view, the federal government's official position is that of dhimmitude. This is a state where conquered non-Muslims (Infidels) adopt an "attitude of concession, surrender and appeasement towards Islamic demands." Writer Bat Yeor defined it as follows:

"As for the concept of dhimmitude, it represents a behavior dictated by fear (terrorism), pacifism when aggressed, rather than resistance, servility because of cowardice and vulnerability. The origin of this concept is to be found in the condition of the Infidel people who submit to the Islamic rule without fighting in order to avoid the onslaught of jihad. By their peaceful surrender to the Islamic army, they obtained the security for their life, belongings and religion, but they had to accept a condition of inferiority, spoliation and humiliation. As they were forbidden to possess weapons and give testimony against a Muslim, they were put in a position of vulnerability and humility."[8]

For America's leaders to placate the Muslim mobs by denouncing and silencing Jones represents a shameful surrender to the Islamists. In essence, our leaders are saying "if you threaten us, we will back down." Like any extortionist, are the Muslims now less likely to attack, or have they been emboldened? The answer is obvious.

If I were President of the United States, here would be my statement related to the proposed Quran burnings:

As the Commander in Chief of a nation of free people, it is my sworn duty to protect and defend the Constitution of the United States against enemies foreign and domestic. Among the rights acknowledged and protected under the Constitution is the right to free speech. Any individual, organization, or nation which threatens or attacks an American citizen in the free exercise of their Constitutional rights should expect to be annihilated.

Thursday, September 9, 2010

Most people know Greece is in financial trouble. But, it would be hard to appreciate just how much trouble until you read Michael Lewis recent piece in Vanity Fair, Beware of Greeks Bearing Bonds. The summary reads:

As Wall Street hangs on the question “Will Greece default?,” the author heads for riot-stricken Athens, and for the mysterious Vatopaidi monastery, which brought down the last government, laying bare the country’s economic insanity. But beyond a $1.2 trillion debt (roughly a quarter-million dollars for each working adult), there is a more frightening deficit. After systematically looting their own treasury, in a breathtaking binge of tax evasion, bribery, and creative accounting spurred on by Goldman Sachs, Greeks are sure of one thing: they can’t trust their fellow Greeks.

Let me just say that "economic insanity" is a gross understatement. I can not do this article justice with a few quotes, so I just urge you to read it. However, if investors and intellectuals only take away the obvious, albeit not unimportant, question "Will Greece default?," they will miss the forest for the trees. That is because I believe Greece is a microcosm of the problems that are destroying the world. Greece, as a living (or dying) symbol of welfare statism and its underlying philosophy of collectivism, is a window into America's future if present trends continue - a future marked by chaotic stagnation and a culture of malevolence.

One enduring myth is the idea that free markets lead to "dog-eat-dog" competition, a kind of atavistic rat race in which greedy, immoral brutes crush each other for profit. The flip side of this myth is the idea that central planning leads to order, harmony, and "social" justice. Yet, the facts show exactly the opposite. In practice, capitalism is characterized by a miraculous coordination of human effort leading to untold efficiency, prosperity, and a benevolent culture of achievement, cooperation and charity. Meanwhile, in practice, socialism results in chaos, stagnation, and a culture of suspicion, guilt, and depravity - exactly the state in which Greece now finds itself. Lewis keenly observes:

The Greek state was not just corrupt but also corrupting. Once you saw how it worked you could understand a phenomenon which otherwise made no sense at all: the difficulty Greek people have saying a kind word about one another. Individual Greeks are delightful: funny, warm, smart, and good company. I left two dozen interviews saying to myself, “What great people!” They do not share the sentiment about one another: the hardest thing to do in Greece is to get one Greek to compliment another behind his back. No success of any kind is regarded without suspicion. Everyone is pretty sure everyone is cheating on his taxes, or bribing politicians, or taking bribes, or lying about the value of his real estate. And this total absence of faith in one another is self-reinforcing. The epidemic of lying and cheating and stealing makes any sort of civic lifeimpossible; the collapse of civic life only encourages more lying, cheating, and stealing. Lacking faith in one another, they fall back on themselves and their families.

This is a profound observation although the author does not seem to completely understand it. He states:

The structure of the Greek economy is collectivist, but the country, in spirit, is the opposite of a collective. Its real structure is every man for himself. Into this system investors had poured hundreds of billions of dollars. And the credit boom had pushed the country over the edge, into total moral collapse.

Note that he observes that it is collectivism, not capitalism, that has led to a kind of dog-eat-dog culture and a "total moral collapse." So, how is it that a system based on the supposed morality of egalitarianism and welfare statism has led, yet again, to "total moral collapse," while economic systems relying on freely acting self-interested individuals historically have led to cooperation, benevolence, and prosperity? To start, consider the following two scenarios. First, imagine you live in a free society where you own your work. You work hard accumulating savings and grow wealthier each day. All around you, others do the same. You are free to choose with whom you trade either labor or goods, where you live, and what you do. Your life is yours and you accept this responsibility, making decisions based on your own independent judgment. If someone suffers a hardship through no fault of their own, you gladly donate to help them, because you see the potential in people, you want to make your world a better place, and because you can afford to do it. You value other people's achievement because it only benefits you - cures for cancer, new methods of production, faster computers, space travel, etc.. You know if someone else is wealthy, it is only because they worked hard and earned it, and so you admire them.

Now consider life under collectivism. Your life is not your own. To the extent you resist the legal obligation to turn over the fruits of your labor to the state, you are considered a criminal. Others live off of your work, so if you evade taxes, you are regarded to be cheating them. Costs are all socialized since everyone is responsible for everyone else and so other people's choices become your business. For example, if you are paying for everybody else's health care, their fitness, lifestyle, and diet becomes your business. Everyone is a potential cost to you if they get sick or don't work. You will have to only work harder to pay for them. Others are a threat if they turn you in to the secret police. If someone is wealthy, you assume they got rich through corruption and theft. You resent them. You wonder if others are paying their fair share? You resent the idea of giving to charity since you already have most of your work taken from you. These simple thought experiments make the practical consequences of individualism and collectivism fairly obvious. Of course, the idea that the mass behavior of self-interested individuals actually leads to prosperity and order is not new. In 1776, economist Adam Smith referred to this phenomena as the "invisible hand." It is unfortunate that this term is used since it is hardly invisible or mysterious. In fact, building on two hundred years of work since Smith, George Reisman's treatise, Capitalism: A Treatise on Economics, is virtually dedicated to nothing other than demonstrating "the harmony of the rational self-interests of all men under freedom." He writes:

Economic progress is the leading manifestation of yet another major institutional feature of capitalism: the harmony of the rational self interests of all men, in which the success of each promotes the well being of all. The basis of capitalism's harmony of interests is the combination of freedom and rational self interest operating in the context of the division of labor, which is itself their institutional creation.

And how specifically does individual rights lead to this harmony?

Under freedom, no one may use force to obtain the cooperation of others. He must obtain their cooperation voluntarily. To do this, he must show them how cooperation with him is to their self interest as well as his own, and indeed, is more to their self interest than pursuing any of the other alternatives that are open to them. To find customers or workers and suppliers , he must show how dealing with him benefits them as well as him, and benefits them more than buying from others or selling to others. As will be shown, the gains from the division of labor make the existence of situations of mutual benefit omnipresent under capitalism. The division of labor, in combination with the rest of capitalism, represents a regular, institutionalized, arrangement whereby the mind of each in serving its individual possessor, serves the well-being of a multitude of others, and is motivated and enabled to serve their well-being better and better.

That there is a "harmony of rational self-interests under freedom" can be proven at an even more fundamental level. When Lewis writes "the structure of the Greek economy is collectivist, but the country, in spirit, is the opposite of a collective" he is observing the logical consequence of a philosophy that holds an inverted view of man's nature and the relationship of the individual to the state. Men are independent, sovereign individuals, not appendages of some collective organism controlled by some philosopher king elite. "Cooperation" enforced at the point of a gun is not cooperation - it is slavery. Rights are necessitated by man's nature. He must be free to think, work, and trade if he is to survive properly, i.e., individuals need protection from the collective. A system based on such a recognition was the unique American achievement. Quoting Ayn Rand:

The most profoundly revolutionary achievement of the United States of America was the subordination of society to moral law. The principle of man’s individual rights represented the extension of morality into the social system—as a limitation on the power of the state, as man’s protection against the brute force of the collective, as the subordination of might to right.

Note that she recognizes that morality consists of pursuing one's values based on one's independent judgment, not on the dictates of a king, priest, or government bureaucrat. She continues:

The United States was the first moral society in history. All previous systems had regarded man as a sacrificial means to the ends of others, and society as an end in itself. The United States regarded man as an end in himself, and society as a means to the peaceful, orderly, voluntary co-existence of individuals. All previous systems had held that man’s life belongs to society, that society can dispose of him in any way it pleases, and that any freedom he enjoys is his only by favor, by the permission of society, which may be revoked at any time. The United States held that man’s life is his by right (which means: by moral principle and by his nature), that a right is the property of an individual, that society as such has no rights, and that the only moral purpose of a government is the protection of individual rights.

(Rand dramatized this issue magnificently in Atlas Shrugged with the story of the 20th Century Motor Company which I discussed in another post related to the harmony of interests principle.) Certainly, you can see that collectivism is the essence of modern Greek culture as described by Lewis. What's more frightening, is the extent to which we can observe the transition to collectivism in America. For example, when pundits discuss a tax cut, i.e., government proposals to steal less money from workers, it is regarded as a "cost" to government as if the government owns their work and as if the government could not possibly reduce its spending. Leviathan government Ponzi schemes like social security are considered untouchable by the political class despite being under water by trillions of dollars. There are so many laws, regulations, and taxes that virtually everyone could be regarded as a criminal if they were audited. Many of us are so taxed as it is, we wouldn't think of giving money to charity, except perhaps as a tax deduction. Already, under the quasi-socialized medical system, there are efforts under way to regulate lifestyle - diet, exercise, smoking, etc. - under the justification that health care costs are "everyone's" problem. Sadly, once immigrants to America were valued since they came here to work and were given nothing but the freedom to pursue opportunity, whereas today, immigrants are often reviled as leeches since in many states they are eligible to receive welfare or government services without paying taxes. Rand wrote:

In its great era of capitalism, the United States was the freest country on earth—and the best refutation of racist theories. Men of all races came here, some from obscure, culturally undistinguished countries, and accomplished feats of productive ability which would have remained stillborn in their control-ridden native lands. Men of racial groups that had been slaughtering one another for centuries, learned to live together in harmony and peaceful cooperation. America had been called “the melting pot,” with good reason. But few people realized that America did not melt men into the gray conformity of a collective: she united them by means of protecting their right to individuality.

Another important feature to recognize about this situation pertains to the necessity of violence under socialism. The article makes it tragicomically clear that one of Greece's many problems is failure to enforce the laws underlying their welfare state. For example, Lewis reports that during election season, tax collectors are pulled off the job for fear of angering voters, and evidently, it is a 15 year legal process to enforce tax evasion cases. In other words, for this type of collectivism to "work", in terms of effectively expropriating loot to redistribute, Greece will have to crack down and begin a process of draconian law enforcement, i.e., it will have to truly persecute its most productive people. When the government is constrained to performing its proper function, the enforcement of laws which protect individuals from violence and fraud, people welcome and urge vigorous government action. It is in their own interest to do so. However, when the government takes to initiating violence against its own people, seizing income and property or jailing dissenters, people naturally and rightfully resist and evade. That such people are considered "criminals" is the hallmark of the twisted ideology of collectivism. Greece still has a choice, as does America, to continue on their path or reverse course. Both theory and practice are clear as to what will happen in either case. The west once underwent a Renaissance by rediscovering the ideas and culture of Ancient Greece. Perhaps, this time, we can start a Renaissance by discovering the terrible ideas and culture of modern Greece!

"Images of the burning of a Quran would undoubtedly be used by extremists in Afghanistan - and around the world - to inflame public opinion and incite violence," Petraeus said in an e-mail to The Associated Press.

Yeah, we wouldn't want to hurt our reputation among members of the Taliban, Iran's Revolutionary Guard, or Hamas...What if some Northerners wanted to burn a picture of Jefferson Davis during the Civil War. Could you imagine General Sherman publicly warning them not to engage in such acts lest we offend the South? Same in World War II or any other war where America's leadership actually had bothered to identify and fight our enemy. Would Petraeus have asked us to goose step around and wear swastikas while we fought the Nazi's so as not to offend them? The very fact that an American General must issue a warning to Americans not to engage in actions protected under our Constitution is proof of the danger of that enemy! The enemy is acting to quash dissent and subjugate individuals to the dictates of Islamic law. That is why they are the enemy! Now, I am not a fan of burning books, and I am certainly not a fan of this reverend, however, this protest is perfectly legal under the First Amendment and should be vigorously protected by our government. The First Amendment is not about protecting speech that will make everyone happy. It is about protecting speech that is likely to upset a lot of people. The armed forces exist to protect the individual rights of Americans, not to goad us into not exercising our freedom in order to not make those who oppose that freedom angry at us!

Tuesday, September 7, 2010

Socialists love cards. Health care insurance cards, food ration cards, social security cards, etc. Much to the chagrin of those Venezuelans who like to eat, dictator Hugo Chávez has recently introduced his own special card:

Presented by President Hugo Chávez as an instrument to make shopping for groceries easier, the "Good Life Card'' is making various segments of the population wary because they see it as a furtive attempt to introduce a rationing card similar to the one in Cuba.

Chavez's opponents rightly worry that his socialist policies are destroying production and these cards are attempts to introduce rationing.

Former director of Venezuela's Central Bank, Domingo Maza Zavala, said this could become a rationing card that would limit your purchases in light of the country's recurring problems with supplies.

"If the intention is to beat inflation, they should find a good source of supply for the entire market and not only for centers that are part of social chains,'' he said. "To do that, you need to encourage local production with the help of the private sector, since they cannot do it by themselves. The government cannot become the ultimate food distributor.''

In other words, they need a free market in food! According to Chávez, no one should worry:

"I have called it a Good Life Card so far,'' Chávez said in a brief statement made on the government television channel. ``It's a card for you to purchase what you are going to take and they keep deducting. It's to buy what you need, not to promote communism, but to buy what just what you need."

So, evidently, if you "need" food, this card will magically produce it. How? He does not say. And how is this different in principle from the absurd socialist schemes of the Obama-Pelosi Regime? After all, Obama and his ilk dream of giving you a universal health card, perhaps he can call it the "Good Health Card", to go along with your social security card, and if we're really lucky, a national ID card.Why do socialists love these cards? Because these cards are the physical manifestation of their core philosophy.

At root, socialists believe everyone is entitled to the work of others regardless of their own effort. In fact, the whole socialist apparatus is just a legalized form of theft whereby the government takes products from those who made them and gives them to those who have not. Such a view is based on a distorted view of the nature of reality. In essence, the socialist imagines that goods simply exist and that their job is to "allocate resources" to those in need. For example, if someone needs a sandwich, they should get it. If someone needs brain surgery, they should get it. These products are "rights" insist the socialists. Of course, the logical question is, to paraphrase Ayn Rand, "provided by whom?" Well, that's where things get a little tricky. Because, in reality, things have to be produced, and those that produce them usually would like something in return for their effort.

Of course, in a free society, individuals trade value for value. Both sides are free not to enter the transaction if they so choose. If one wishes to give a value away for less than another would pay, that is his choice based on his own values. Fundamentally, such a system is a system of justice because each participant owns the fruits of his own labor and is free to trade based on his own independent judgment.

Such a system is anathema to the socialist. He wishes that certain forms of work were worth more than anyone is willing to pay. He is angry that man's nature requires such a system of trade and wishes things were different. He wishes those who work really hard would just give away some of their things to those who do not work as hard. He seeks to use the armed power of the state to enforce these wishes on society. However, when he implements this form of force, he finds that the goods do not get produced as readily as they once did, since men are forced to give away more than they get in exchange. In the face of decreasing supplies, prices rise so he passes a law to limit prices from increasing. Even less gets produced at the lower price. He gets even angrier that reality does not conform to his wishes. The socialist himself can not produce the goods, so he directs his anger at those who do not produce enough supply. He accuses them of selfishness and hoarding. He threatens more violence, but this only results in even less goods.

Enter the card.

To the socialist, the card is a way around reality's limitations. The socialist can not create goods from thin air, but he can create a card with demands printed on it. Everyone gets one! In this way, the card can be seen as a physical manifestation of egalitarianism. The card represents a wish - a demand against the nature of reality to give the holder something he did not earn. It is also a threat. When one waves the card, goods and services are to be produced for the waver, or else.

The card also confers a sense of control. The central planning Philosopher King needs information, data, and statistics with which to plan and herd his chattel. He needs to track his subjects, perhaps assign them each an innocuous number, control their movement, prevent them from threatening his order while optimizing the allocation of "resources."

It should be noted that these sector level cards pale in comparison with the card of all cards - fiat currency. These pieces of paper created by the government are the ultimate egalitarian dream. They cost virtually nothing to produce but entitle the holder to anything his heart desires - they can even be used to "stimulate" his herd - assuming, of course, there is anything to trade them for.

Sunday, September 5, 2010

(update: Part 1 of 3 is here. Part 2 and 3 follow). Based on the book "Financial Fiasco" by free market economist Johan Norberg, this is a great documentary that emphasizes a recurring theme on this blog. It traces the causes of the financial crisis and demonstrates how current government policies are replaying those same causes, setting the world economy up for an even bigger version of the present crisis. As Vernon Smith states: "The solution is the problem, and that is why we had a problem in the first place." (HT: Garret Seinen)

Friday, September 3, 2010

Karen Maley details Paolo Pellegrini's farewell letter to investors, in which he explains his view that government engineered market distortions have put the markets in a precariously binary state - between the recognition of short term stimulus effects and the almost certain longer term calamity of debt and stagnation.

Beth Haynes, founder of The Black Ribbon Project, wrote an excellent post rebutting the ethics of "social justice" which "the AMA is actively working in conjunction with Association of American Medical Colleges to inculcate [in] young physicians." This "social justice" movement goes hand in hand with efforts to turn doctors into indentured servants - placid appendages of the nascent state health bureaucracy. I hope her efforts, and those of others, continue to awaken the medical profession to the ethics of individualism and the politics of liberty and individual rights.

Quote of the Month

“We are fast approaching the stage of the ultimate inversion: the stage where the government is free to do anything it pleases, while the citizens may act only by permission; which is the stage of the darkest periods of human history, the stage of rule by brute force.” -- Ayn Rand